Contact – NEST

A

AIP (Agreement in Principle): A statement from a lender showing how much they might lend you, based on an initial assessment, before you make a full application.
APR (Annual Percentage Rate): The total cost of a mortgage over its term expressed as a yearly percentage, including interest and standard fees.
Arrangement Fee: A fee charged by the lender for setting up a mortgage, which can often be added to the loan or paid upfront.
Affordability Assessment: A lender's check of your income, outgoings and commitments to confirm you can afford the mortgage repayments.
Adverse Credit: A credit history that includes missed payments, defaults, CCJs or bankruptcy, which some specialist lenders can still consider.

Buy-to-Let (BTL): A mortgage for a property you intend to rent out rather than live in, assessed mainly on rental income.
Base Rate: The Bank of England's official interest rate, which tracker and many variable mortgage rates move in line with.
Bridging Loan: Short-term finance used to "bridge" a gap, such as buying a new property before your current one sells.
Buildings Insurance: Cover for the structure of a property against damage from fire, flood, storm and similar risks — usually a lender's requirement.

Completion: The final legal step in a property purchase, when ownership transfers and the mortgage funds are released.
Conveyancing: The legal process of transferring property ownership, handled by a solicitor or licensed conveyancer.
Credit Score: A number representing your credit history, used by lenders alongside their own criteria to assess risk.
CCJ (County Court Judgment): A court order made against someone who owes money and has not repaid it, which can affect mortgage eligibility.
Capital Repayment: The portion of a mortgage payment that reduces the amount you originally borrowed, as opposed to interest.

Deposit: The amount you contribute towards a property purchase upfront, with the mortgage covering the rest.
Decision in Principle: See AIP (Agreement in Principle) — some lenders use this term instead.
Disbursements: Costs a solicitor pays on your behalf during conveyancing, such as search fees and Land Registry fees.

ERC (Early Repayment Charge): A fee some lenders charge if you repay your mortgage, in full or in part, before the end of a fixed or discounted period.
Equity: The difference between your property's value and the amount you still owe on your mortgage.
Equity Release: A way for homeowners, typically aged 55+, to release cash tied up in their property without moving out.
Exchange of Contracts: The point at which a property purchase becomes legally binding, ahead of completion.

Fixed Rate: A mortgage interest rate that stays the same for an agreed period, giving predictable monthly payments.
First-Time Buyer: Someone purchasing their first home, who may be eligible for certain schemes or better rates.
Freehold: Outright ownership of a property and the land it stands on, with no time limit.

Gifted Deposit: Money given, rather than lent, by a family member to help fund a deposit — lenders usually require a signed declaration.
Guarantor Mortgage: A mortgage where a family member agrees to cover repayments if the borrower cannot, often used to boost affordability.

Help to Buy: A government scheme (regionally variable and now largely closed to new applicants) that helped buyers purchase with a smaller deposit.
HMO (House in Multiple Occupation): A property let to three or more unrelated tenants sharing facilities, which needs a specific type of mortgage.

Interest-Only Mortgage: A mortgage where monthly payments cover only the interest, with the capital repaid separately at the end of the term.
Income Protection: Insurance that replaces part of your income if you're unable to work due to illness or injury.
Indemnity Insurance: A one-off policy protecting against a specific legal defect or risk identified during conveyancing.

LTV (Loan to Value): The size of your mortgage as a percentage of the property's value — a lower LTV usually means better rates.
Leasehold: Ownership of a property for a fixed term under a lease, while someone else (the freeholder) owns the land.
Lender: The bank, building society or specialist provider that lends you the mortgage.
Life Insurance: A policy that pays out a lump sum or income to your family if you die during the policy term, often used to cover a mortgage.

Mortgage in Principle: See AIP (Agreement in Principle).
Mortgage Term: The length of time, usually in years, over which you agree to repay your mortgage.
MIP: Shorthand some lenders use for Mortgage in Principle — see AIP.

Negative Equity: A situation where your property is worth less than the outstanding mortgage balance.

Offer Letter: A formal document from the lender confirming the mortgage amount, rate and conditions once underwriting is complete.
Overpayment: Paying more than your required monthly amount to reduce the mortgage balance and term faster, subject to lender limits.

Porting: Transferring your existing mortgage deal to a new property when you move, instead of taking out a new one.
Product Fee: See Arrangement Fee.
Protection Insurance: An umbrella term covering life insurance, critical illness cover and income protection.

Remortgage: Switching your mortgage to a new deal, either with your current lender or a new one, without moving home.
Redemption Statement: A document showing exactly how much is needed to pay off your mortgage in full on a given date.
Repayment Mortgage: A mortgage where each payment covers both interest and some of the capital, so the balance reduces to zero by the end of the term.
Retention: An amount a lender holds back from the mortgage funds until certain repair works are completed.

SVR (Standard Variable Rate): The lender's default interest rate, usually applied after a fixed, tracker or discounted period ends.
Shared Ownership: A scheme where you buy a share of a property (typically 25–75%) and pay rent on the remainder.
Stamp Duty (SDLT): A tax paid on property purchases above a certain price threshold in England and Northern Ireland.
Survey: An inspection of a property's condition and value, ranging from a basic valuation to a full structural survey.
Self-Employed Mortgage: A mortgage assessed using accounts, tax calculations (SA302) or accountant references rather than payslips.

Tracker Rate: A variable rate that moves directly in line with a base rate (usually the Bank of England base rate) plus a set margin.
Title Deeds: Legal documents proving ownership of a property, now typically held electronically by the Land Registry.

Underwriting: A lender's detailed assessment of your application, income, credit history and the property before issuing a formal offer.

Valuation: A lender's assessment of a property's value to confirm it supports the mortgage amount requested.

Whole-of-Market Broker: A mortgage broker who can access deals from across the entire lending market, rather than a limited panel.

Yield (Rental Yield): A buy-to-let property's annual rental income expressed as a percentage of its value or purchase price.